Monday, October 31, 2011

Medicare Premiums for 2012

An article was published in the New York Times last week indicating that premiums for Medicare Part B would be increasing by less than expected next year.  In fact, the premiums for Part B coverage would be going up by only $3.50 to $99.90 rather than the additional $6.70 up to an expected total of $106.60.  The article states that "Administration officials said the smaller increase showed their prudent management of the program..."  All I can say to that is maybe.

What else could be the cause?

Well, basic human behavior.  Premiums are a function of the probability of something happening to trigger a claim and the amount of the claim.  The amount of the claim the result of a basic demand relationship.  At the out of pocket price faced by individuals, what is the quantity of a particular service that they will choose to consumer to maximize their utility.  That is a function of preferences, health status, and income.

As you can see, a lot of things affect the premium other than just the cost saving plans put in place by the administration.  Without more data from a rigorous analysis it would be impossible to determine whether the cost saving measures imposed by the administration are truly the cause of smaller increases than expected.

And, even if they are the cause of smaller increases, we have to ask "what, if anything, is being given up?"  If we were to perform a cost-effectiveness analysis of the administrations plans would we find that we are spending less while getting equal or better health outcomes?  Or would we find, in contrast, that the health outcomes are worse?  And if they were worse, would we then find that they were just a little worse?  And, if we contrast this with the money saved (or at least not as much being spent) it would be acceptable.  Or would we find that the health care outcomes are sufficiently worse than expected that we would not feel we are getting a good deal on the savings.

In other words--what is the true root of the savings and is the health of our Medicare population suffering or not?  I would want a lot more data before concluding that what seems like sensible and favorable results of policy are as rosy as this article suggests is possible.

Tuesday, October 25, 2011


There was an interesting piece in the New York Times yesterday about mammograms (  A key question for public health experts to address is what proportion of women who obtained a screening mammogram and for whom the screening mammogram detected the cancer had their clinical outcome changed by the detection.

Why wouldn't the clinical outcome be changed by detection?  The article states it quite well. Some cancers never would have amounted to anything.  They are very small growths that never would cause a problem. Yet, once they are detected on a mammogram, they are treated.  This is actually referred to as "overdiagnosis".

A second group is so aggressive that they can't be stopped.

A third group is more aggressive than the overdiagnosed group but not so aggressive that the screening really did anything.

It is described in the article as "only those that are aggressive enough to be potentially dangerous but that are found at just the right time to stop them from being dangerous" actually have their clinical course changed.

A difficulty is that we can't always tell which is which when the screening first occurs.  This does suggest that we use a lot of resources for (and have a lot of concerns about) mammograms that don't always live up to the expectations that patients have.

It creates an interesting set of resource-related questions.